DAILY TECHNICAL ANALYSIS FOR FEBRUARY 06, 2023petar skakalov
Current level – 1.0791
In the last trading days of the previous week, the greenback gained significant ground against all major currencies after the Federal Reserve made another interest hike of 0.25% The strong NFP data gave the necessary stimulus to the bears to continue pushing down the pair which led EUR/USD towards a test of the support at 1.0780. In the early hours of today’s trading session the pair is hovering just above the mentioned support, a successful breach of which could easily pave the way for the pair towards the next key support at 1.0720. However, the forecast for today’s trading session is for this support zone to show strong resistance to the bears. It is highly likely that the pair will enter in short consolidation in the range 1.0700 – 1.0840, as market participants are eagerly expecting the Fed Chair Powell speech (Tuesday, 17:00 GMT) regarding Fed’s intentions to continue their hawkish stance or slow down the pace of interest hikes encouraged by the improved employment data for the last month. However, if the bulls prevail and manage to lead the pair above the resistance at 1.0840, their next target appears to be the level at 1.0926.
Current level – 128.68
The strong U.S. dollar, in combination with the speculation that the new governor of the BoJ will be Masayoshi Amamya (choice seen as more likely to extend the current ultra-easy policy), led to an impulsive upward movement that helped the pair to easily overcome all resistance levels on its way up, without any hesitation, and the pair is headed towards a test of the key resistance at 132.72. If the mentioned resistance withholds the bulls’ pressure, it is highly possible for a corrective move to take place and to witness a retracement towards the support at 131.58 and even the next one at 129.70. However, if the bulls manage to keep control over the market and breach the resistance at 132.70, we may expect a further upward movement towards the resistance at 134.00.
Current level – 1.2040
The sterling lost ground against the dollar, like the other currencies, and we have witnessed a strong downward movement that led to a decrease in the value of the pound against the U.S. dollar of approximately 2.8% just in the last two trading days of the previous week. At the time of writing this analysis, it seems that the bulls are trying to limit the sell-off, or at least to slow down the free fall. If the pair manages to remain above the mentioned support, we may expect a price correction towards the resistance at 1.2100, where a confirmed breach of this level would pave the way for the pair towards the next resistance at 1.2165. Today, if the data regarding the Construction Purchasing Manager index for the U.K. at 9:30 GMT is better-than-expected, traders may try to start an upward correction towards the resistance at 1.2165. On the other hand, disappointing data could strengthen overall negative market sentiment and lead to a potential resumption of the downtrend.
Gold price achieves more bearish correction
Gold price begins to rebound bearishly after testing 1878.80 level this morning, which supports the continuation of the correctional bearish trend for the rest of the day, which targets 1828.70 as a next main station, reminding you that the continuation of the bearish wave depends on the price stability below 1878.80.
The expected trading range for today is between 1850.00 support and 1890.00 resistance.
The expected trend for today: Bearish
Source: Technical analysis